I remember reading an article about Porsche, years ago, where they talked about producing one less car than they expected to sell for any particular model, creating a demand that would, quite literally, never be met. While I didn't get the point back then, reading through this piece about fashion house Chanel and their limited-availability dresses has made a light go on for me. Yeah, I can be pretty dense sometimes.
When Chanel SAS stocked boutiques in November with its latest range of 4,000-euro ($5,380) dresses and 3,200-euro quilted handbags for winter getaways to places such as St. Barts, the company wasn’t sure how consumers would react.
“We were a bit skeptical about the global environment,” said Bruno Pavlovksy, who heads closely held Chanel’s fashion division. Two months later, “more or less everything is sold out. It was quite a surprise.”
Chanel, owned by France’s Wertheimer brothers, is surpassing its own expectations as rivals from bag maker Coach Inc. (COH) to Cartier-owner Cie. Financiere Richemont SA (CFR) report flagging sales that disappoint investors. Read More